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PRESCRIPTION FOR PENNSYLVANIA Right State Right Plan Right Now STRATEGIC PLAN FEBRUARY 2008 Chronic Care Management, Reimbursement and Cost Reduction Commission THE PENNSYLVANIA CHRONIC CARE MANAGEMENT, REIMBURSEMENT AND COST REDUCTION STRATEGIC PLAN Table of Contents Executive Summary 3 - 6 Introduction 7 Chronic Disease in Pennsylvania 8 - 23 Pennsylvania’s Poor Treatment Record for Chronic Illness 9 Chronic Illness Is Growing At An Alarming Rate in Pennsylvania 10 The Financial Consequences of Not Properly Treating Chronic Illness in Pennsylvania 16 Infrastructure Issues Must Be Addressed to Reduce Chronic Care Costs and Improve Care in Pennsylvania 19 Efforts Elsewhere to Implement the Chronic Care Model 21 The Chronic Care Model 24 - 32 The Model’s Six Elements 25 Chronic Care Model Research Findings 27 Relationship to the Medical Home 29 Pennsylvania Agency Action to Address Chronic Illness 32 1 Strategic Plan for Chronic Care Model Implementation in Pennsylvania 33 - 46 Vision 33 Starting with Diabetes and Asthma 34 Goals & Implementation Priorities for the Redesign of Chronic Care in Pennsylvania 36 Policy Principles 38 Major Tasks & Timeline 41 Addendum 47 Appendices 49 Appendix A: Existing Care Model vs. the New Chronic Care Model - A Case in Point Appendix B: Executive Order Appendix C: Pennsylvania Chronic Care Management, Reimbursement and Cost Reduction Commission - Commission Members Appendix D: Composition of Commission Subcommittees Appendix E: Pennsylvania Medical Assistance Initiatives Directed at Improved Chronic Care 2 Executive Summary The present system of providing health care was designed to treat acute illness, not control chronic diseases. In the face of rising levels of chronic disease and spiraling health care costs, governments, businesses, insurance companies and Pennsylvania families have, out of necessity, chosen to limit health care services, benefits and visits as ways of fighting expenses. Evidence is mounting around the country that exactly the opposite approach to chronic disease is more successful. Early, consistent and persistent health care intervention for those with chronic disease will likely be more cost-effective and will dramatically improve the quality of life for anyone with chronic disease. In May 2007 the Pennsylvania Chronic Care Management, Reimbursement and Cost Reduction Commission was created and its first requirement was to develop a strategic plan for a Chronic Care Model to improve the quality of care while reducing avoidable illnesses and their attendant costs. This report is part of that requirement. About half of all Pennsylvanians have a chronic disease, including diabetes, asthma, pulmonary disease, heart conditions and others. These chronic disease conditions are exacerbated in Pennsylvania by obesity, an older population, smoking and other factors that are hardly unique to the state but statistically more prevalent. Chronic diseases are the leading cause of death and disability in the Commonwealth. Chronic disease patients account for 80% of all health care costs and hospitalizations, 76% of all physician visits and 91% of all filled prescriptions. Much of the hospital and emergency room costs for patients with chronic conditions would be unnecessary if patients simply received evidence-based care in a setting where multiple practitioners and health educators can easily communicate and collaborate. Only 56% of patients with chronic disease receive that kind of recommended care. Those patients with complex conditions receive even less of the recommended care. In Pennsylvania, chronic conditions often become neglected conditions which become crisis conditions, with predictable increase in expense, lost productivity, pain and suffering. For 2007, it is projected that avoidable hospital admissions by chronic disease patients will top $4 billion in hospital charges not counting emergency room visits. Pennsylvanians with heart disease are admitted unnecessarily to hospitals more than two-and-a-half times as much as the best performing states, 3 approximately three times as often for asthma and more than four times as much for diabetes.1 In Pennsylvania, one in five citizens is over the age of 60 and those over 85 are the fastest growing population segment. Pennsylvania rates for obesity, alcohol abuse, smoking and sedentary habits are all higher than the median for other states. The issues lie with how patients respond to their illness as well as with how medicine is practiced by most primary care clinicians in Pennsylvania. Primary care practices are often poorly compensated by insurers, third party administrators and government under existing reimbursement models and not currently organized to deliver coordinated care, forcing them to see too many patients out of financial considerations. Consequently, chronic disease patients who have not learned to manage their own diseases wait until a crisis develops and need to be rushed to, or referred to, the hospital emergency room. It is a system that is frustrating for providers, increases suffering for patients and one that is ripe for change in the form of the Chronic Care Model, which was developed by Edward H. Wagner, MD, MPH, of the MacColl Institute for Healthcare Innovation. The six key components include: Self-Management Support: Patient assistance in managing chronic disease and setting health improvement goals. Delivery System Design: Transformation from a reactive physician model to a proactive model using multidisciplinary care teams. Decision Support: Care based on evidence-based care guidelines. Clinical Information Systems: Better tracking and monitoring of chronic disease patients across disciplines and timeframes. Community: Partnerships with community resources that encourage healthy living. Health Systems: Incentives for quality improvement among care givers. One of the largest and most successful examples of implementation of the Chronic Care Model is the Veterans’ Affairs Health Care System (VA). Early in the 1990s, the VA was deeply troubled by complaints regarding the quality of its care for the 5.2 million people it serves. 1 Agency for Healthcare Research and Quality, 2005 Annual State Comparison of Health Quality. 4 After adopting the six elements of the Chronic Care Model, the VA steadily improved perceptions to the point where it regularly outscores private sector providers while also reducing per patient health care costs by 25%. In other states, like Vermont and Washington, where the Chronic Care Model has been adopted, there have been significant reductions in emergency room visits and other positive results. According to the American Medical Association, the health process/outcomes for chronic care patients improved in 82% of the studies published so far, while cost savings were achieved in 67% of studies. These cost savings are for health care costs only and do not factor in benefits regarding productivity and attendant financial benefits to citizens who currently pay higher insurance premiums and taxes to support an ineffective system of primary care for chronic disease. The Commission established four Strategic Goals designed to change the paradigm for the receipt of medical care by persons with chronic diseases, as well as their ability to obtain support in self-management of their conditions. The Strategic Goals are: The widespread use of a new primary care reimbursement model; Broad dissemination of the Chronic Care Model to primary care practices across Pennsylvania; Achievement of tangible and measurable improvement in the quality of care for chronically ill patients; and Reduction in the cost of providing chronic care and mechanisms to ensure that savings are realized by those paying for health care. As determined by the Commission, the statewide chronic care strategic plan has five core elements to be implemented region-by-region over a multi-year period. They include: The establishment of primary care learning collaboratives and disease registries, as well as practice redesign and support. Insurer-provider incentives aligned with the Commission’s parameters. Insurer-consumer incentive alignment with Commission parameters. Community support resources. Measurement and evaluation. 5 Detailed planning initiatives are more fully described throughout the following report and financial benefits that have been achieved by other entities adopting a Chronic Care Model are well documented herein. The report also makes clear that there would be significant impetus for adoption of the Chronic Care Model if its only likely achievement was a dramatic improvement in the quality of life of Pennsylvanians with chronic diseases. That it both improves the health of chronically ill Pennsylvanians while simultaneously reducing the cost of their care makes this issue an urgent priority. In a state and region where much of the best of American medicine was born and flourished over the decades, the implementation of a chronic care program will reenergize both the people who practice medicine and a patient population who will be given the resources and information to manage their own well being. 6 Introduction Today, we face a compelling problem with health care in the Commonwealth. We have a system in Pennsylvania that derives its success from measurements of illness rather than health. Because of this yardstick, healthcare in our Commonwealth focuses too heavily on cures and emergencies, rather than on management and maintenance toward a healthy life, despite the predominant health

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